tv Nightly Business Report PBS September 3, 2010 6:30pm-7:00pm EDT
>> susie: u.s. unemployment ticked higher last month, but the total number of jobs lost was not as bad as expected. even though nearly 15 million americans are looking for work, some companies still have a hard time filling open positions. >> tom: and many americans who once had careers in the fast lane are going in a new direction, working in the non- profit world. you're watching "nightly business report" for friday, september 3. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
facorting in census workers, but that number was lower than economists predicted. >> tom: susie, there were some encouraging signs. companies added 67,000 jobs to payrolls, the eighth straight month of job creation in the private sector. we have two stories, the specifics of that jobs report and a dilemma-- what happens when a company wants to hire, but can't find the right workers? here's scott gurvey. >> reporter: there had been signs the economy was in decline, raising fears of a double dip recession. now, says economist bruce kasman, the signs show some stability. >> it's not a good report. we lost jobs from the census workers. but net of public sector loss, 67,000 is not a healthy job market in terms of increased employment-- but we see a stable trajectory of about 70 per month over the last three months. we see hours rising, we see income rising modestly. it's a soft patch, but not one that's intensifying as we go through the summer months. after rising for two months, manufacturing jobs fell in august.
but professional and business services jobs increased and, in a really big surprise, construction jobs were added in the month. the increase was only 19,000, but it raised hope the beleaguered construction industry is leveling out. the unemployment rate, which had held steady for two months, rose slightly to 9.6%. economist dean maki says that was actually a positive sign, the result of more people deciding to look for work. >> we think the unemployment rate is going to gradually decline in coming months, so we don't see a significant move up from current levels. what we're expecting is that job growth is going to be picking up as businesses shed some of the caution that's been holding them back from more significant job gains over the past few months. >> reporter: the so-called underemployment rate also rose last month to 16.7%. it includes people whose hours have been cut as well as those who would like work but have given up out of frustration. scott gurvey, "nightly business report," new york.
>> reporter: after what you just heard, you are going to find this hard to believe. there are employers out there who say they are having trouble finding good people to hire even in this economy. employers like drew greenblatt at marlin steel wire. how can you have high unemployment and you have good jobs going unfilled? >> we have a mismatch. we have people out there who are skilled and trained, let's say, to work in a retail showroom. or work in a mcdonalds or a restaurant. they are not necessarily trained to be able to know what a radius is. or to know how to read a tape measure, or to know how to read a blueprint. or know how to change a bearing, or a die set in a robot. >> you can see marlin steel wire's challenge right here. 51 minutes. that's how much longer this machine will run before it shuts down and has to be set up again. now the operator who set up this machine has already gone home for the night. his shift is over. if they could find somebody else to come in and set up this
machine, it could run all night long. greenblatt says he is even having some trouble finding a bookkeeper. after getting more than 250 resumes, he found just four candidates who know manufacturing and job costing. one toured the floor while we visited. and, yes, greenblatt is offering more money-- 20% more-- to find the right person. >> so we thought it was going to be really easy to fill this position. so we're actually surprised about how much of a challenge it's been for us. >> reporter: experts in manufacturing, like jerry jasinowski, aren't surprised. he estimates one fifth of the nation's unemployment problem is structural, meaning there's a mismatch between what people can do and what the economy needs them to do. >> all of this talk about short- term stimulus, even with the good ideas that are sometimes laid out, misses the point that there is not a short-term fix to this high unemployment problem. we are in a new slower growth economy with higher
unemployment, and we are going to have to invest a lot more in skill training. >> reporter: but greenblatt's strategy is to keep costs low, move fast and deliver high quality. that's how he beats china. to do that, he says, he needs workers right now. so why don't you just train them, isn't that the solution? >> : that's a good strategy, the problem is that we're lean. and when you're lean, you don't have a lot of people who are around who have free time to train. >> reporter: other employers we spoke with say some jobs are hard to fill, but for different reasons. some skilled workers are afraid to take a chance on a new employer. some are underwater on their house and can't move for a new job. and there are employers who admit in a tough economy they get a lot more picky about who they will hire-- maybe too picky. which is why obama economic adviser christina romer says there is no evidence of a massive skills mismatch. >> this is not the new normal. it's the old cyclical. that we are still in the middle
of a recession. we still have not enough demand for a normal level of output, and that's the fundamental reason unemployment is high. >> reporter: but don't tell that to drew greenblatt. he just spent $700,000 on new equipment-- there's just one thing missing. >> we're standing adjacent to five robots that are not running right now. and they're not running right now because i don't have enough smart people like them to set them up right now. >> reporter: darren gersh, "nightly business report," baltimore. >> tom: here are the stories in tonight's n.b.r. newswheel: that employment news led to higher stock prices on wall street. the dow rose nearly 128 points, the nasdaq added almost 34 and the s&p 500 up 14 points. trading volumes were very similar to yesterday's pace. 946 million shares on the big board. 1.7 billion on the nasdaq. b.p. has removed the blowout preventer that didn't stop oil from spilling into the gulf of mexico. it's a key piece of evidence in the disaster investigation.
meantime, a light sheen of oil was spotted near the mariner energy platform that burned yesterday in the gulf. the coast guard says it's not a leak. the government is investigating the cause of the fire that forced 13 workers overboard. >> susie: more analysis now on today's jobs report. joining us, brian wesbury, chief economist at first trust advisors. >> hi, susie, good to be with you. >> susie: good to have you, too. what's your read on today's report? >> i think thepy economy is recovering. it is not a reagan boom, if you will. but it is not a double dip. we're in the middle and improving. so far this year private sector jobs have grown for eight months in a row. the average growth rate of about 95,000 a month. as i said, that's not a boom, but it is a recovery. >> susie: well, you know, those are good and positive and encouraging numbers, but we also have to add in that economists tell us we have to create
250,000 jobs a month to get that unemployment rate down, and we're far off from that? >> yeah. what is interesting here, there is another survey of employment, the household survey, where we actually call people up, rather than asking employers, and that shows that we are gaining over 200,000 a month so far this year. that's why the unemployment rate has come down to 10.1, to 9.6. it is still high, but i think clearly the job market is improving, and the odds of a double dip, which i never thought were high, are basically down to zero now. i'm not worried at all about the economy. >> susie: tell us why. because we have 15 million people out of work, cautious about spending. and businesses aren't spending. so why are you saying there is a zero percent chance of a double dip recession? >> the real reasons are the federal reserve is easy, and productivity is strong. just think -- not you, but think a little about history.
we had 10.8% unemployment in 1981, '82, and yet we had a boom of a recovery in '83, '84. just because people are out of work and dower about the economy, that has nothing to do with whether or not we have a recovery. we're going to have a recovery, and i think it will get stronger in the months and quarters ahead. >> susie: let me ask you something you've been writing in a lot of your reports, technology, productivity, and creating jobs. what's the connection there? >> sure. this goes back to the report you just had. think about it: a farmer of 1890, try to get them to use g.p.s. systems today to drive a tractor and try to figure out where to put nitrogen in a field is not going to happen. what we're going through today is another transformation, just like the industrial revolution, where we took all of those people who used to work on a farm, and we put them to
work in different places. that has to happen today in order to get this unemployment rate down. and it's not going to happen unless we have a really vibrant entrepreneurial sector. and that's tough to do when government is getting bigger, and tax rates are going up and all of that. we're actually hurting ourselves. >> susie: real quickly, speaking of government, president obama is going to unveil some proposals to boost the economy and create jobs. what does he need to do? >> i say emulate canada. canada has cut its government spending. its corporate tax rate is now down to 18%. ours is 35%. by the way, canada shrunk the size of its government, and it has an 8. unemployment rate, and we have 9.5. they're winning. >> susie: you would like to see some movement on taxes. >> absolutely. >> susie: we're going to have to leave it there, brian. thanks a lot. have a great weekend. >> you, too, susie. >> susie: we've been
speak with brian wesburg, chief economist. >> tom: september is a good month to remember, so far. let's get to tonight's "market focus." the major indices have been climbing since the month began on wednesday, closing close to three-week highs. the dow gained almost 3% this week, with buying continuing since the big rally wednesday.
the nasdaq was up 3.7% over the past five sessions, and the s&p 500 added 3.8% this week, ending with the best three-day rally since may. stocks today were able to build on the buying, with financial stocks leading the way. the financial select e.t.f. includes banks, insurance and real estate companies. it added 2%. this fund hit a new 52-week low tuesday. the financial sector has seen best performance since wednesday. j.p. morgan led the way for the dow industrials, up more than 2.5%. fellow bank goldman sachs jumped more than 5% on twice its usual volume. mutual fund investment company janus capital led the sector, up almost 7%. even though the housing market remains a concern, among the financial stocks seeing green today were mortgage insurance companies. the p.m.i. group added almost 10%. s&p equity rates the stock a "sell," that's an improvement from its previous "strong sell" recommendation.
m.g.i.c. helped by reporting a 9% rise last month in its mortgage insurance business. shares jumped more than 7%. radian group came along, up 5.5%. soup was not good news for campbell's. soup sales are still dropping, even though earnings were up. its quarterly results were three cents better than estimates, but revenues fell thanks to more promotional spending. shares fell more than 3%. volume was heavy, about twice what it usually is for c-p-b. while we have food in focus, corn prices jumped to a two-year high. a year ago, corn was around $3.60 a bushel. today, it settled at $4.65 per bushel. up almost 30%. a private forecast thinks this year's crop will be less than earlier estimates, coming as global demand has been rising.
ag stocks like caterpillar got a boost. c-a-t was among the dow leaders, up 2%. deere is now less than $1 from a new 52-week high. and an exchange-traded note that follows corn and other grain prices is within 75 cents of a new high. in june it was at a 52.week low. its ticker is j-j-g. and that's tonight's "market focus." >> susie: goldman sachs today became the second big bank to comply with the so-called volcker rule under the terms of the financial overhaul. goldman will close its proprietary trading unit-- that's the division that trades
with the firm's own money. j.p. morgan was the first of the big banks to comply, telling its traders of the shutdown earlier this week. >> susie: monday, with the markets closed for labor day, we continue our focus on the job market. join us for "help wanted," a "nightly business report" special report. also next week, the fed issues its latest beige book, and we'll see july's trade numbers. and friday, we're joined by "market monitor" guest robert drach, he's editor of the "drach weekly research report." >> susie: an appeals court in france has upheld a counterfeiting conviction against online auction house ebay. but, that court did not uphold the fine originally imposed against the company, cutting it from nearly $49 million to just under $8 million.
french fashion firm louis vuitton, moet hennesy sued ebay two years ago, saying it was hurt by knockoff handbags and clothes sold on the website. both sides claimed victory after today's appeals court ruling. >> tom: fewer people and fewer companies filed for bankruptcy last month, despite the recovery's continued weakness. court records show personal bankruptcies fell nearly 8% from july's level to 127,000 filings. corporate filings dropped 5%, just under 7,000 businesses sought bankruptcy protection. experts say many banks are now trying to work with businesses, instead of forcing them into chapter 11.
>> tom: in a slow growth, low interest rate market, tonight's market monitor wants to get paid to be a shareholder. he's chuck carlson, chief executive officer with horizon investment services. he joins us tonight from the c.m.e. group in chicago. >> thanks for having me back, tom. >> tom: you're looking for dividends in this market, with that in mind, what kind of stock market returns do you think investors should expect? >> i think in the short run, short run meaning the next three to six months, i think if you can get somewhere around a 5% to 6% return, you're going to be doing pretty well. i have a feeling we're going to see a market that
is fairly range-bound here for the remainder of the year. thus it will be a two yards and a cloud of dust type market. if you can get return, especially from dividend yields, which i think are pretty good. that's what you should be looking at right now. >> tom: 5 or 6% over six months is 10 or 12%. that's much better than historic average? >> i think there is a potential for that. i think it will be back-loaded in the last three months as opposed to the remainder of this year. i think the market will probably struggle for the remainder of this year. january and february of next year will be pretty good. >> tom: looking at dividends, we've seen companies get more aggressive with their cash, especially when it comes to buybacks. dividends have actually gone in reverse. companies in the s&p 500 are paying more in stock buybacks than dividends. couldn't that provide more of a lift than dividends? >> it could be.
obviously when you're buying back stock, you're reducing the number of shares and hopefully stock prices. but you're seeing a fair amount of countries increasing their dividends certainly than in '09 and '08. the shares as far dividend increases are improving. >> tom: february 19th was the last time you were in that chair. you're picks back then, a couple of insurance companies, aflac and travellers. split performance. ross stores, a discount retailer. nice performance, up almost 12%. do you still like this trio? >> yes, we still like all three and still own all three. >> tom: in dividend space, tech giant intel, a 3.5% yield. but in the past week or so it has warned of slower business, and lots of cash in terms of the buyouts of mcafee and finian. can it grow the dividend? >> i think it definitely will grow the dividend over the next 12 to 18 months. they still have a fair
amount of cash and earnings momentum. yes, they downgraded their revenue growth a bit here. interesting, on the day they did that, the stock actually rose. i think we're at a point where there is pretty value there. you can buy that stock at nine times the 2010 estimate. 3.5% yield, and 5 to 10% dividend growth. >> tom: two more to get to, abbott labs, another 3.5% yield here. >> abbott has increased their dividend for 38 consecutive years. it is an interesting plan in emerging growth market. after this acquisition, they're going down 7% to the indian pharmaceutical market, and you can buy it for 12 times earnings. and eps is going to grow double percent. >> tom: you're going north of the border, into canada, for rogers communications. up near the highs for the stock price in the last 12 months. what's the catalyst? >> good earnings growth.
they've beaten the estimates over the last four quarters rather handily. the investors are looking for a yield. it is a 3.5% yielder as well. again, double-digit earnings growth this year. again, fast growers, good yields, good dividend growth, and good value. >> tom: and disclosures for these stocks here, chuck? >> we own all of them. i personally own all of them as well. >> tom: we appreciate the ideas. chuck carlson, c.e.o. at horizon investment services. >> susie: finally, a different take on employment. some people looking for work are finding jobs at not-for-profits. johns hopkins university says employment at non-profits grew about 2.5% during the worst part of the recession, while it fell more than 3% at for-profits. as diane eastabrook reports, many non-profits are attracting professionals who felt burned by corporate america or who are just plain burned out. >> did you ever think you'd be
back at fenwick working here? >> only in my nightmares. >> reporter: greg pritz walks the halls of fenwick high school as he did 35 years ago. back then, he was a student. today pritz is fenwick high's finance director. the former chief financial officer joined the staff last may, after being jobless for 18 months. pritz says working here is giving him a sense of satisfaction he never got in the corporate world. >> the thing that we all remember is that it's all about the kids, and it's all about getting them to the university and helping them make the most of their lives. that feels good to me. it's a lot different from where i was before. >> reporter: job experts say some people search for more meaningful work in times of crisis-- like recession or war. others look during a personal crisis. >> i made great money, i had wonderful benefits, and i was bored. >> reporter: two years ago, wendy lynn left a high-paying insurance gig in downtown chicago for an all-girls catholic high school on chicago's gritty south side.
as maria high school's president, she wears many hats-- including chief fundraiser. >> i was wondering if you could pay a visit to maria high school... >> reporter: and mother hen. >> so, how are your classes going overall? it's easy to work seven days a week in this particular job, because there are always events going on in the city of chicago where you might be able to meet people who might be able to assist maria high school and its mission. >> reporter: making the transition from the corporate world to the non-profit world can be difficult. first, there's the pay. both pritz and lynn are making considerably less now than they did at their previous positions. culture shock can be another problem, says outplacement expert john challenger. >> a lot of for-profit people come into the non-profit environment and feel that it is too slow, that things don't happen quick enough. there are too many committee decisions, and that can be frustrating. >> reporter: pritz and lynn say the transition to non-profits wasn't especially difficult. and both think they have found their true calling.
>> you know, our mission is to create scholars, artists, and leaders. >> i love my job. i love coming to work every day. >> reporter: diane eastabrook, "nightly business report," chicago. >> susie: that's "nightly business report" for friday, september 3. i'm susie gharib. have a great weekend. happy labor day, tom. >> tom: you too, susie. i'm tom hudson. we hope to see all of you again next week. "nightly business report" is made possible by: